From West to East: Estimating External Spillovers to Australia and New Zealand

 
Author/Editor: Sun, Yan
 
Publication Date: May 01, 2011
 
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Summary: This paper examines the size and source of external spillovers to Australia and New Zealand based on a structural vector autoregression (VAR) approach. It finds that during the last decade shocks from emerging Asia have become more important than those from the United States in affecting Australia’s business cycle. A 1 percent shock to emerging Asia’s growth is found to shift Australian growth by about 1/3 percent. Furthermore, there is evidence that commodity prices dominate the transmission of shocks from emerging Asia to Australia. The influence of emerging Asia on New Zealand is found to come indirectly through Australia, with Australian shocks transmitting almost "one-on-one" to New Zealand, largely through financial factors.
 
Series: Working Paper No. 11/120
Subject(s): Asia | Australia | Business cycles | Commodity prices | Cross country analysis | Emerging markets | Exports | External shocks | Financial sector | New Zealand | Regional shocks | Spillovers | Terms of trade

Author's Keyword(s): Spillovers | business cyles | Australia | New Zealand
 
English
Publication Date: May 01, 2011
Format: Paper
Stock No: WPIEA2011120 Pages: 21
Price:
US$18.00 (Academic Rate:
US$18.00 )
 
 
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